A first in Pakistan?

This model is not novel; entrepreneurs have employed it in other countries. But for Pakistan, this is a first.

PkShip users are given addresses in the US, the UK, Germany and China. Whenever they visit an online retailer and make a purchase, they will get their products delivered to the closest global address, from where PkShip will send them the packages to their address in Pakistan.

This is different compared to outlets such as homeshopping.pk,shoppingbag.pk, and yayvo.com, who deliver products from Amazon and eBay without customers making the purchase directly.

We test the service

No one has really offered this before, so we decided to test the service to find out if it really is all that it promises.

While we can vouch for PkShip’s punctuality, there were multiple issues we encountered.

We ordered an electric toothbrush with separate heads, priced at around $49 on Amazon. The package weighed about 0.5kg, which according to the shipping fee table on PkShip, should cost us $15 to transport to Pakistan.

The customs or import duty on a toothbrush is 20 per cent of the price. For all prospective buyers, it is essential that you go through this document on the FBR website to know what you will be charged as duty.

Per our calculation, 20pc of $49 equals around $10. That puts the total price of our purchase at $74 ($49+$15+$10).

But here’s the catch. We ended up paying around $90 for the purchase. Turns out we missed the 15pc sales tax and the 6pc income tax in our calculation.

At the end, we paid almost $16 more than what we had set aside for the product.

Hidden charges?

At first glance, it appeared to us that the sales tax and income tax would be included in the costing. Having to pay the ‘unknown charges’ at delivery was a disappointment to say the least.

But how could have this been avoided? And what does it mean for PkShip’s customers?

While the service is a first for Pakistan, there is a corollary. Customers will have to be selective about what they want to buy because not every purchase will end up making economic sense. Buying an iPhone and getting it delivered via PkShip would be a good idea. But that may not hold true for other goods such as our electronic toothbrush.

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And this is where Seemab’s vision of “educating his customers” will have to come into play. Unless customers are shown they will end up paying less through PkShip, the service will fail. It seems a lot more work needs to be done.

Will an upgraded user interface help?

We certainly think so. Their website is still very basic and one has to focus to understand how to go about making an actual purchase. It was also very surprising that there is no calculator on the website to allow customers to determine how much a certain purchase will end up costing them.

In our case, we were caught unawares of the sales and income taxes, despite having done considerable research on the service. An on-site calculator would have certainly made things more transparent.

How do they ensure products are cleared without delay by Pakistan customs?

Seemab tells us they have partnered with FedEx, UPS and DHL, three of the largest and most renowned courier services in the world, to take care of customs clearance and payment of duties.

“These courier companies go by the books so there is no reason the customs department will stop our shipments. The courier companies will pay customs duty on our shipments (on our customers’ behalf). We pay them (courier companies) after clearance and charge the same amount to our customers along with the shipping fee. It’s as simple as that,” says Seemab.

“PkShip is paying huge money to these courier companies in order to complete the customs documentation to ensure timely clearance at customs house.”

So there is no avoiding the duty then, which is not so much of a hassle if timely delivery, without any damage to goods, is ensured.

“The rule of thumb is that the prices of branded products will always be cheaper on the brand’s own outlet/website. So our business model is eliminating the middle-men to pass on maximum savings to the final customer.”

Seemab says the venture is also going to empower the ‘Deals’ page at pkship.com to save customers’ time in finding “deep discounted products across the globe.”

“We’re writing power algorithms in order to update our page for deep discounted deals.” In this way, PkShip also aims to help users in finding goods that can be delivered at their doorstep cheaper than from anywhere else on the web.

In the first three weeks since their launch in Dec 2015, PkShip had 500 registered users.

“We expect to grow in volume soon,” says Seemab.

Our verdict

PkShip is a new service for Pakistan’s online shoppers and there is no doubt that their business model holds the potential to change the dynamics of Pakistan’s retail industry.

Kudos to the team behind the venture, but if this service is to become mainstream, there is much more that needs to be done.

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